Wall Street was mixed on Wednesday, with the Dow and S&P 500 down and heavyweight growth stocks boosting the Nasdaq as focus shifts to comments from Federal Reserve Chair Jerome Powell later in the day.
Powell’s speech will be closely watched for signs of a slowdown in the pace of interest rate hikes by the central bank, as well as to assess the general health of the U.S. economy.
“The market is expecting him (Powell) to say maybe we won’t do the 75 bps hike ... when people listen to the Fed Chair speak, they’re waiting for that little hint,” said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.
Hopes that the Fed will now hike rates in smaller increments and recent data pointing to a mild cooling in prices have positioned the benchmark S&P 500 index for its second straight month of gains.
The Dow Jones Industrial Average has gained 17.5% in the last two months, while the Nasdaq index has added 4.2%.
“After the gains that we’ve seen, you’ve got some investors that are taking a little bit of money off the table here today,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. “Again, nothing dramatic.”
Traders expect the Fed to increase rates by 50 basis points in December, with the rates peaking in June 2023.
Heavyweight growth firms, Apple Inc, Microsoft Corp and Alphabet Inc, rose between 0.1% and 1.0%.
Tesla Inc’s shares rose 0.3%, after China Merchants Bank International said Tesla’s sales in China in November were boosted by price cuts and incentives offered on its Model 3 and Model Y.
Data on the day was mixed as the ADP National Employment report showed private employment increased by 127,000 in November, below expectations of 200,000 jobs, suggesting demand for labor was cooling amid high interest rates.
The Labor Department’s closely watched nonfarm payrolls data is due on Friday. A report showed U.S. job openings falling to 10.334 million in October, against 10.687 million in the prior month.
Another reading showed the U.S. economy rebounded more strongly than initially thought in the third quarter.
“A mixed bag this morning. So I don’t really make much out of that, I’d like to see what Powell has to say,” Saluzzi added.
At 12:07 p.m. ET the Dow was down 157.90 points, or 0.47%, at 33,694.63, the S&P 500 was down 5.02 points, or 0.13%, at 3,952.61, and the Nasdaq was up 29.04 points, or 0.26%, at 11,012.81.
3M Co fell 3.1% amid weakness in its consumer-facing businesses.
Biogen Inc jumped 4.2% after its experimental Alzheimer’s drug slowed cognitive decline in a closely watched trial.
Declining issues outnumbered advancers for a 1.15-to-1 ratio on the NYSE and a 1.09-to-1 ratio on the Nasdaq.
The S&P index recorded three new 52-week highs and one new low, while the Nasdaq recorded 51 new highs and 120 new lows.
Chipmaker Micron Technology Inc slipped 4.8% after cutting its 2023 forecast for supply of its memory chips, while U.S.-listed shares of Grab Holdings Ltd jumped 4.2% after the ride-hailing and food delivery firm bumped up its 2022 revenue forecast.
Declining issues outnumbered advancers for a 2.10-to-1 ratio on the NYSE and for a 2.41-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week high and two new lows, while the Nasdaq recorded 33 new highs and 56 new lows.
Chinese leader Xi Jinping and U.S. President Joe Biden met on Monday for long-awaited talks that come as relations between their countries are at their lowest in decades, marred by disagreements over a host of issues from Taiwan to trade.
Among other stocks, Biogen Inc BIIB.O and Eli Lilly LLY.N gained 3.4% and 1.4%, respectively, after the failure of Swiss rival Roche’s ROG.S Alzheimer’s disease drug candidate.
Theater operator AMC Entertainment AMC.O jumped 6.5% as Marvel’s latest film “Black Panther: Wakanda Forever” grossed $330 million globally in its opening weekend,